The journey of Crypto’s to regulation in Brittain was a uneventful one to date.
In the last month, the nation’s financial regulator warned investors against investing in cryptocurrency and warned that they could lose everything they put into the crypto market. Recently, the UK’s chief financial minister announced that the UK will soon be an eminent crypto-powered country.
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These two opposing perspectives show how uncertain the future of crypto was in the UK However, it was only recently that the government announced it will implement guidelines that will see stablecoins considered a legitimate method of payment.
Many online gambling sites which are featured on web pages such as betting.co.uk are already accepting cryptocurrency as a means of payment. However, following the introduction of the British stablecoin the floodgates will open to allow Britains to move into an online economy powered by cryptocurrency.
If you’re unfamiliar with stablecoins, they’re digital tokens that have been backed 1:1 by a nation’s national fiat currency, which is in this instance it is that is the British Pound. There are banks that have in reserve the exact number of pounds they release them to users as digital tokens, which can be exchanged with the pound that is paper-backed. These institutions are tightly monitored and audited on a regular basis due to obvious reasons.
They will be these stablecoins which will be the first step for users to move away from paper Pound to the world of cryptocurrency. You can trade, invest or even buy goods on the internet using cryptocurrency. Cryptocurrency enthusiasts claim that the technology will without doubt help make payments more transparent, more simple and speedier. However, the skeptical ones are digging on the table by saying that it can be used for criminal activities like money laundering and could also be responsible for a greater carbon footprint because “mining” or maintaining the cryptocurrency ledgers consumes huge quantities of energy, which contributes in carbon dioxide emissions.
New law
On April 4, this year it was announced that the United Kingdom announced their strategy to harness the power of blockchain to facilitate payments for consumers. The law will be approved to put stablecoins in similar regulatory guidelines in order to be in line with the current laws on payment.
Here are some important points to consider about Brittan’s efforts to be a hub for cryptocurrency in the United Kingdom. becoming a hub for cryptocurrency:
- The first step is the legalisation of stablecoins to be an acceptable form of payment, which will allow the UK to be a cryptocurrency hub.
- An FCA Collaboration with the Royal Mint to create develop an NFT (non-fungible token) and the establishment of a group that will engage and closely collaborate with the financial sector. The Chief Chancellor of the Exchequer, Rishi Sunak, has issued an instruction for the mint of royal authority to create the NFT and is expected to release before the end of summer.
- The UK government will introduce legislation that will establish a legal structure for stablecoin issuers as well as service providers to be able to operate within the UK.
- John Glen, the Economic Secretary, has declared his intention that the UK will take advantage of the advantages of blockchain technology as well as the potential that the distributed ledger provides to revolutionize market conditions for financial transactions. The technology allows information to be shared, synchronised and distributed within a decentralised systemthat provides greater efficacy, transparency and resiliency to manipulation.
- Britain will in the coming year consider further developing regulations for more broader crypto assets such as Bitcoin. The legislation will take into account the carbon footprint and energy consumption of these blockchain networks.
- The latest plan for the use of cryptocurrency is to investigate the possibilities of blockchain-based securities to be issued gilts and bonds of the government.
What will this mean for me?
This will certainly raise the issue of what taxes will be imposed on the services and goods purchased using cryptocurrency.
When you think about paying with the British stablecoin it is certain to help in the tax payment for products and services much more simple. But, when it comes to traditional cryptocurrency like bitcoin, the following is the case in the UK.
There is no requirement to pay taxes on your cryptocurrency if you’re:
- Purchase crypto with GBP.
- Holding crypto in a digital wallet. (only when it is sold)
- Transferring crypto between digital wallets.
- Giving cryptocurrency to a charity.
- The gift of cryptocurrency to a spouse.
It is important to note that you are able to offset losses on capital against capital gains in the case of cryptocurrency. Additionally, you can keep the registered losses to offset any possible capital gains.
